Question of the day
2026-09-04
Is accounts payable part of 'debt' in the enterprise value bridge? Explain.
Answer it out loud first — like you would in the room. Then check yourself:
Reveal the model answer
Model answer
No. Accounts payable is an operating liability - it funds the working-capital cycle and is already captured in the operating cash flows / EBITDA you're valuing. Debt in the bridge means FINANCING liabilities that carry an explicit return to capital providers (interest-bearing borrowings, leases). Including AP would double-count it against operations and wrongly inflate EV. The clean test: would this liability appear in the financing section and require a return to a lender? AP does not.
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